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COVID-19 Pandemic -A Testing Time for Tourism and Hospitality in Thailand

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The COVID-19 pandemic has recently led to a global alarm due to its fatal nature from the spread of the coronavirus. Thailand is currently aware of this unprecedented time and the Thai cabinet has imposed a state of emergency to prevent the spread of this virus. The tourism and hospitality sectors have been devastated by the coronavirus. Therefore, the purpose of this study is to examine the impacts on tourism and hospitality, including the airline and hotel sectors. The study used systematic literature review methods to review the data, both academic and practitioner, for textual analysis and synthesis. Data were obtained from fifty articles and behaviourist theory is also discussed in this paper to explain the current phenomena. The paper indicates the impact of the pandemic on tourism and the airline and hotel sectors. Moreover, the results also highlight the negative impacts on Thailand's tourism and hospitality industry from the crisis by confirming the decrease in the number of international tourist arrivals. The implementation of social protection and government aid policies to support people affected by the pandemic is also presented in the results of this study. In the conclusions and recommendations, this research paper will further help the industries to adopt innovative strategies and the best policies to be implemented in the future to combat the disease. Future research is also recommended in this study.
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COVID-19 Pandemic A Testing Time for Tourism and
Hospitality in Thailand
Sanhakot Vithayaporn
Faculty of Business and Technology
Stamford International University, Bangkok
Email: sanhakot@hotmail.com
Received: 16 October 2020 Revised: 10 November 2020 Accepted: 11 November 2020
Abstract
The COVID-19 pandemic has recently led to a global alarm due to its fatal nature from the
spread of the coronavirus. Thailand is currently aware of this unprecedented time and the Thai
cabinet has imposed a state of emergency to prevent the spread of this virus. The tourism and
hospitality sectors have been devastated by the coronavirus. Therefore, the purpose of this
study is to examine the impacts on tourism and hospitality, including the airline and hotel
sectors. The study used systematic literature review methods to review the data, both academic
and practitioner, for textual analysis and synthesis. Data were obtained from fifty articles and
behaviourist theory is also discussed in this paper to explain the current phenomena. The paper
indicates the impact of the pandemic on tourism and the airline and hotel sectors. Moreover,
the results also highlight the negative impacts on Thailand’s tourism and hospitality industry
from the crisis by confirming the decrease in the number of international tourist arrivals. The
implementation of social protection and government aid policies to support people affected by
the pandemic is also presented in the results of this study. In the conclusions and
recommendations, this research paper will further help the industries to adopt innovative
strategies and the best policies to be implemented in the future to combat the disease. Future
research is also recommended in this study.
Keywords: COVID-19 pandemic, tourism and hospitality sectors, Thailand,
international tourist arrivals
Introduction
It is an unprecedented time in Thailand and across the globe, and this catastrophic
situation has been critically investigated by the government according to the procedures of
the World Health Organization, which must be complied with in order to prevent the spread
of the virus. The effects on the global economy and especially the tourism sector include the
thousands of tourist attractions worldwide that have been closed, and society and business
have ground to a halt. This affects the major key players in the tourism supply chain
including airlines, transportation providers, cruise companies, and hotel chains that have
suffered unfathomable damage, estimated to amount to €400 billion (Goodwin, 2020;
Nicolás, 2020).
The tourism sector generated up to THB 1.93 trillion of the countrys revenue in 2019,
with 39.7 million international arrivals. Particularly in terms of travel, the tourism and
hospitality sectors are those that have been highly impacted. The Thai government has
reported losses in tourism revenue of THB 100 billion within the first quarter of 2020
(Ministry of Tourism and Sports, 2020). The significant effect of the outbreak is the decline
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of international tourist arrivals. Not only is the tourism sector affected, but it is also
anticipated by the government that the nation will face a 67 per cent GDP decline
(International Monetary Fund, 2020). The Thai government, therefore, imposed an entry ban
on all international tourists by the closure of the international airports. Also, the cabinet
declared a state of emergency announced by the prime minister of Thailand on 25 March
2020 (Royal Thai Government, 2020). Thai citizens were ordered to stay home to safeguard
themselves from the virus. This also brought a major downfall in the tourism industry from
the domestic as well as the international perspective, and it has a direct effect on all tourists
remaining in the country, who were urged to return to their home country according to the
requirements from their government.
Thailand’s Tourism and Hospitality Sectors
UNWTO (2020a) stated that the worlds international tourist arrivals have had
significant continual growth for the decade, reporting 1.5 billion international tourist arrivals
in 2019, which is expected to reach over 1.8 billion by 2030 (UNWTO, 2020b). Thailand is
the most visited tourist destination or the inbound market due to the attraction and fascination
of its tourism products. Tourism is the primary contributor to Thailand’s income and the
industry has seen tremendous growth and become one of the most developed sectors in the
country (Dabphet et al., 2012). Thailand offers tourists the diverse tourist products ranging
from cultural tourism, wellness tourism, and spiritual tourism to eco-tourism with a wide
variety of tourist attractions that are the product categories that have gained popularity over
many years, which are growing massively.
Tourism in Thailand welcomed a vast 39.7 million international tourists in 2019, and a
rise of 4.24 per cent year over year has been reported; hence, tourist receipts have contributed
THB 1.9 trillion to the revenue of the nation (Ministry of Tourism and Sports, Department of
Tourism, 2020). According to the statement, the top ten countries for international tourist
arrivals in 2019 were China (10,994,721), Malaysia (4,188,868), India (1,995,516), Korea
(1,887,853), Laos (1,845,375), Japan (1,806,340), Russia (1,483,453), the USA (1,167,845),
Singapore (1,056,836) and Vietnam (1,047,629). The sum totals of international tourist
arrivals statistics follow in Table 1.
Table 1
January December 2019 Tourism Statistics
Description
2019
2018
Tourist Arrivals
39.8 million
38.2 million
Tourist Revenue
THB 1.93 trillion
THB 1.89 trillion
Source: www.dot.go.th
Table 1 illustrates the international tourism statistics and financial performance in
Thailand from January December 2019 for the number of tourist arrivals and revenue
perspective. The revenue generated from tourism of THB 1.9 Trillion indicates an increase of
3.05 per cent compared to 2018.
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Tourist Arrivals by Origin Country
Based on the statistics of the Department of Tourism, Thailand, China maintained the
first rank in terms of tourist arrivals during the past five consecutive years during 2015-2019.
Chinese made up 25 per cent of Thailands 39.7 million international tourists in 2019.
Secondly, Malaysian arrivals to Thailand remained in the second tier during 2015-2019.
Korean tourist arrivals in Thailand during 2015-2019 maintained the third position during the
past five consecutive years. Thailand has welcomed over 48 million Chinese tourists in the
past five years with the spending in only 2019 reaching THB 543 billion. Tourism revenue
totalled up to 20% of GDP for the entire year of 2019 (Theparat, 2019).
Table 2
Thailand Tourist Arrivals by Country of Origin
Country
January December
2015
2017
2018
China
7,936,795
9,806,260
10,534,340
Malaysia
3,418,855
3,494,488
4,032,139
Korea
1,373,045
1,709,265
1,796,401
Source: www.dot.go.th
In the top ten tourist source markets, China was the country with the most visitors to
Thailand and had positive growth. However, when the Chinese government announced the
quarantine of the city of Wuhan on 23 January 2020 and stopped allowing overseas trips, the
effect was consequently felt immediately in Thailand for the whole tourism industry and by
tourism stakeholders. For example, the tourist shopping areas and tourist attractions were
suddenly stagnant due to the disappearance of Chinese tourists in particular. The labour force
sector in the tourism industry has been devastated since the closure of international airports in
Thailand to prevent the spread of the coronavirus from overseas arrivals. Considering the
precariousness of tourism and hospitality-related jobs, these sectors are significantly affected
by the changing environment in the tourism industry (Chanel, 2020).
In addition to the tourism sector, the airline industry has also been severely affected by
the spread of the virus due to the prevention policy of many countries causing the closure of
airports, which has led to the cancellation of the flights to and from Thailand. Sales and
revenue of the airlines have been drastically decreasing, and this subsequently affects the
employee income and unemployment. Many nations around the globe have suspended their
trade and travel relationships with Thailand due to the spread of the coronavirus and
compliance with the World Health Organization (Ekstein, 2020). Hence, the objective of this
study is to investigate the effects of COVID-19 on tourism and hospitality including the
airline sector, which is the main industry affected by the crisis. The research on the COVID-
19 pandemic in Thailand, particularly in relation to the tourism and hospitality sector, is still
limited as the pandemic is ongoing and difficult to conclude. However, a conceptual review
of the pandemic is likely possible with the conclusions and implications that are also
presented in this study.
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Methods and Materials
This paper focuses on the reports and critical analyses of the phenomena of the
pandemic and its effect on the tourism and hospitality industry in Thailand. Review of the
news reports and case studies and a documentation analysis technique were used. The author
carried out a study of peer-reviewed articles on the current situation from relevant journals,
such as Tourism Management, based on a total of 50 identified primary studies. It also adopts
a systematic literature review method to probe into the existing scholarly articles conducted
on the COVID-19 pandemic’s impacts on the tourism and hospitality industry. The
systematic literature review has the advantage of providing transparent and explicit protocols
by which researchers search for and assess the field of studies relevant to a specific research
topic; thus, it is widely used in the business and management field (e.g. Macpherson & Holt,
2007; Deng, 2012). The systematic literature review method has been constructed with the
following criteria to set our search boundaries as a protocol of the search strategy, as shown
in Figure 1.
Figure 1:
Systematic literature review method for this study
Firstly, the author searched in the following databases: Google Scholar, Elsevier,
Emerald, SAGE and Web of Science, which are most frequently used as the academic
research sources for the topic of the COVID-19 pandemic’s effects on the tourism and
hospitality industry, and the current news reports on tourism and hospitality in Thailand from
organised sources. Secondly, the analysis of research titles and key conclusions in the
abstracts of the selected literature was conducted, then filtered results were exported to
reference management for further analysis. Moreover, a thorough analysis of each article by
using categorisation criteria was conducted in this paper (Macpherson & Holt, 2007). To
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generate the literature review that covers all the necessary topics that are discussed in this
paper, the author used behaviourist theory, which was extended to explain what current
phenomena of devastation is affecting human’s behavioural changes, both mental and
physical. Staddon describes the work of B.F. Skinner, the psychologist who extended
behaviourist theory in a new model, and whose idea of prepared mind led to the momentous
discovery of the reinforcement schedule (Staddon, 2020). Humans must adopt the situation
which reinforces them to change and survive in the environment, which is the idea to support
B. F Skinner’s theory of behaviourism (Staddon, 2020). The era of the new normal is causing
all types of human behaviour, both mental and physical, to change. The importance of this
reinforcement is consistent with behaviouristic theory.
Literature Review
The conceptual studies and secondary data adopted from various sources were gathered
to focus on the impact of this pandemic on the tourism and hospitality sectors, especially the
airlines and hotel industries. Data were collected from the relevant research. The first step
was to determine what impacts from the emerging COVID-19 on the tourism and hospitality
industry in Thailand are occurring. The second step was the analysis and synthesis of the
secondary data, and finally, the data were concluded with the implications of the study. Data
regarding the effects of the coronavirus on the Thai tourism industry were reviewed in order
to be used in support of the data analysis and synthesis for this study.
The Phenomena of Crises and Disasters
Generally, the phenomena of crises and disasters are of great interest for researchers
whenever the world is facing an unprecedented situation such as the coronavirus pandemic.
However, they distinguish between the two different terms, as a crisis is defined as a
disruption that physically affects a system as a whole and threatens its basic assumptions, its
subject sense of self, and its existential core” (Pauchant & Mitroff, 1992, p. 15), while
disasters are explained as situations where an enterprise is confronted with a sudden
unpredictable catastrophic change over which it has little control” (Scott & Laws, 2005, p.
151). Hence, a disaster can be divided into two main types: natural disasters, which include
earthquakes, flooding and epidemics; and human-made or socio-political created disasters,
such as wars, terrorist attacks, and political and economic crises. These human-made
disasters have been found in the literature more frequently than the natural disasters.
The novel coronavirus pandemic is natural, but the impact is a socio-political or
human-made disaster when the focus of the research field is on economic development
through the management of the pandemic. Subsequently, this coronavirus pandemic disaster
is adapted to as a crisis involving the organisational, political or business performance.
Through the coronavirus-induced economic crisis, similarities with other research were
found, such as the study of Papatheodorou et al. (2010) on the 2008 economic crisis, and the
research on the behaviour of travellers and their rationalization following tourists
economizing strategies during economic crises conducted by Campos-Soria et al. (2015).
According to Avraham (2015), the political aspect of the coronavirus pandemic
presents similarities to the use of theories of tourism research during the period of the Arab
Spring uprising on the refugee crisis and how a country’s image was impacted by the political
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crisis (Zenker et al., 2019). The topic of tourist behaviour studies on crises with either natural
effects or socio-political or human-made effects is helpful to understand the current
developments (Alvarez & Campo, 2014), for example, conceptualizing a segment of crisis-
resistant tourists that might explain why some tourists keep travelling and an examination of
the safety perceptions of international tourists.
Tourism Sector and Epidemic Diseases
The world has experienced several major epidemics/pandemics in the last 40 years, yet
none had similar implications for the global economy as the COVID-19 pandemic. COVID-
19 is not as contagious as measles and not as likely to kill an infected person as Ebola, but
people can start spreading the virus several days in advance of symptoms (Gössling et al.,
2020).
There is a definitive correlation in the negative outcomes between the tourism industry
sector and epidemic diseases (Ekstein, 2020). Before this pandemic, studies investigated the
tourism industry sector and its crises, both in the long and short terms. Back in 2014-2015,
the Ebola virus pandemic in African nations such as Guinea, Liberia and Sierra Leone had
negative impacts on the tourism and hospitality sector (Kongoley-MIH, 2015). In 2006, the
World Health Organization (WHO) declared the Zika virus as a public health emergency of
international concern, and Brazil faced a crisis of this pandemic disease that caused 1.4
million cases (Jamil et al., 2016). In 2003, the outbreak of the SARS virus impacted the
growth of tourism, particularly in China (Zeng et al., 2005).
For two decades, the tourism sector has been the most sensitive industry towards the
effects of pandemic diseases. In 2019, the ambiguous effects in the tourism sector were
caused by the coronavirus, and it has also greatly impacted the world economy as well. The
international tourist arrivals have been one of the most important and significant indicators in
terms of the world economy since the 1950s (Deegan, 2020). The tourism industry in
Thailand is one of the essential contributors of up to 20% of the GDP of the countrys
economy, and Thailand is considered to be one of the worlds most visited inbound tourism
markets, according to the number of international arrival tourists.
Impacts of COVID-19 on the Aviation Industry in Thailand
Aside from the Thai tourism industry, massive effects have been felt by the Thai
aviation industry as well. Starting with the spread of the new coronavirus, the aviation
industry has been among the most severely impacted as a result of the lower passenger load
factor and revenue (International Air Transport Association (IATA), 2020). Thai Airways
International as the national flag carrier has announced the suspension of all domestic and
international flights to and from Thailand, which is followed by other carriers, who also
suspended their flights. Many countries implemented the restriction of travel policy, which
caused all airlines to comply with the policies promptly. All aviation has been ceased
regarding the operations of the entire industry, and aircraft have been grounded at airports,
which also impacts the revenue of the Airports Authority of Thailand. Thai Airways
International, the flag carrier, is faced with the company undergoing a critical situation and
has urged employees to take unpaid leave (Thai Airways International, 2020).
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The Civil Aviation Authority of Thailand (CAAT) is an independent agency of the Thai
government under the supervision of the Ministry of Transport. CAAT is responsible for
prescribing, regulating and auditing Thailand’s civil aviation (Civil Aviation Authority of
Thailand, 2020). CAAT first announced a temporary ban on all international flights to
Thailand dated 6 April 2020, and all international passenger flights faced a temporary ban
starting from 7 April 2020, 00.10 am to 30 April 2020, 11.59 pm for the prevention of
coronavirus outbreaks. Later, on the date of 27 April 2020, CAAT announced an extension of
the temporary ban on all international flights to Thailand from 00.10 am on the 1st of May
2020 until 31 May 2020, 11.59 am to ensure the continuity and effectiveness of the
precautions against the COVID-19 outbreak. The third announcement was made on 16 May
2020 for the extension of the temporary ban on all international flights to Thailand until 30
June 2020, starting from the 1st of June 2020, 00.10 am, until 30 June 2020, 11.59 pm. The
temporary ban of all international flights to Thailand directly affected airline operations,
particularly in terms of revenue, and caused an increase of unpaid employees in the aviation
industry.
Impacts of COVID-19 on the Hotel Industry in Thailand
Tourism in Thailand is on the rise, ranking among the worlds top most visited
countries (Jeaheng et al., 2019). According to the Ministry of Tourism and Sports (2020), the
key performance indicator shows that the growth occupancy rate (OR) in 2019 rose to 71.4
per cent compared to 70.16 per cent in 2018. As the state of emergency was announced by
the government on 25 March 2020, Thai citizens were required to stay home for quarantine
and safeguard themselves following the temporary ban on all international passenger flights
to Thailand. The hotel industry of the entire country has been drastically affected, as many
hotels laid off their employees due to the closure of hotel businesses with further unpaid
leave and cut wages for the hotel businesses that continue to remain open. The Thailand
Hotel Association (THA) has estimated a loss of 139,000 jobs in the hotel industry from
January May 2020, and by the end of this year, it estimates the probable loss of up to
500,000 jobs in the hotel industry since 130 hotels have been reported to be banned from
operation (Khaosod English, 2020).
Impact of COVID-19 on the Tourism Industry in Thailand
The tourism industry sector greatly contributed to the countrys economy in 2019 and
there was a positive outlook for 2020. However, the coronavirus pandemic stopped the whole
world, including Thailand. According to the first-quarter (January-March) report released by
the Tourism and Sports Ministry, tourism revenue figures decreased by nearly 40 per cent.
The impact of the pandemic hammered the tourism sector in the first three months of the
year. Chinese arrivals generated 57.6 billion baht revenue last year, which was the largest
contributor; however, this year is suffering from a 63.7 per cent decrease year-on-year. Also,
there were decreases in the top five markets, namely Russia, Britain, Malaysia and Japan, as
shown in Figure 2.
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Figure 2
Thai Tourism Statistics January to March 2020
Source: Ministry of Tourism and Sports
Figure 2 shows a decrease of 37.9 per cent in international tourist arrivals and a revenue
drop of nearly 40 per cent. Chinese tourists decreased by 63.7 per cent.
The Tourism Authority of Thailand (TAT) (2020) stated the estimation of international
tourist arrivals for this year to be 14 million as announced by the Tourism and Sports
Minister, as shown in Figure 3.
Figure 3
Tourism in Thailand, International Tourist Arrivals in 20082019 and Estimation for 2020
Source: Ministry of Tourism and Sports and Tourism Authority of Thailand (TAT)
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Figure 3 shows the estimation of international tourist arrivals by the end of this year
drastically decreasing by more than 50 per cent.
Social Protection and Government Aid Responses to the COVID-19 Pandemic
This section presents how Thailand has introduced or adapted social protection and
government aid in response to COVID-19. The contribution from the government has
increased in the key areas of the response. The purpose of this review is to summarise the
government intervention, including the social assistance, social insurance and labour market
programs. It is deliberately focused on supply-side programs, for example, mostly wage
subsidies and activation of other programs. The data sources include official information
published on government websites, while the full database was validated and integrated by
regional and national social protection teams at the World Bank, as shown in Table 3.
Table 3
Government Plans and Ongoing Social Protection in response to COVID-19
Social
Protection
Categories
Core COVID-19
Measure
Descriptive Summary
Social
Assistance
Cash Transfers
(New)
The government provides a cash transfer of THB 5,000
($153) for 3 months for those who registered for aid (21.7
million people applied). The total program cost is $4
billion.
Social Security
Contributions
(Waivers/Subsidies)
Tax measures include a reduction in the rate of
contributions to the social security fund of employers and
employees from a rate of 5% to 0.1% of wages for 3
months (the same contribution rate of the government is
maintained at 2.75% of wages, and the contribution
amount of the insured people is reduced while the
government pays the same amount).
Health Insurance
Benefits
The Thai Social Security Office will cover all medical
costs of those infected with COVID-19. Moreover, health
insurance premiums deductions were increased to THB
25,000 from 15,000.
Unemployment
Insurance
Workers covered by the Social Security Fund (SSF)
receive increased unemployment compensation up to 50%
of their salaries.
Unemployment
Insurance
Thailand has initiated a multi-prong package for Thai
workers forced to return from Korea due to the outbreak.
This includes: (i) those who are members of the Overseas
Workers Fund will be entitled to THB 15,000
compensation (also available to member workers who
return from other countries that have announced a COVID-
19 outbreak); (ii) the Ministry of Labour will coordinate
with labour offices in Korea to ensure that Thai labourers
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receive pending wages and benefits (the Department of
Employment has identified over 81,562 domestic jobs for
Thai labourers returning from overseas).
Labour
Markets
Wage Subsidies
SMEs can deduct three times the cost incurred by salary
payments from April to July 2020 for the employees who
are members of the Social Security Office and receive a
salary of up to 15,000 baht/person/month. The SMEs must
maintain the same level of employment during that period
as to the number insured under social security end-
December 2019.
Source: https://www.straitstimes.com/asia/se-asia/thailand-unveils-us127-billion-stimulus-
package-to-ease-coronavirus-impact
https://thethaiger.com/coronavirus/400-billion-baht-stimulus-announced-to-boost-thai-
economy
Table 3 shows the intervention from the government to provide aid to all of the Thai
populace that are more directly impacted by the pandemic. The whole supply chain of every
industry is facing the crisis and its impacts, especially with regard to the workforce and cash
flow.
Conclusions and Recommendations
This paper highlighted that the tourism and hospitality sectors in Thailand, including
the aviation industry have experienced devastating situations and airline companies, due to
the suspension of all flights to and from Thailand and the temporary closure of international
airports to prevent the spread of the COVID-19 pandemic. The hotel industry is also going
through a time of crisis because the tourism sector has suffered a huge loss of revenue. The
findings of this study can contribute to the managerial implications for the overall Thai
tourism industry. Firstly, for the Tourism Authority of Thailand board to better understand
the most effective policies to be implemented in terms of tourism activities, and the strategies
to gain trust from international tourists. Tourism safety should be highlighted in future
periods of tourism. Furthermore, the study can provide travel agencies with suitable products
and itinerary packages to leverage tourism. Secondly, as airline industries have been
disrupted by the pandemic, which is anticipated to continue for a while, the domestic airline
industry may take the initiative to advise their passengers on the current situation of the
pandemic crisis and provide basic proactive measures such as maintaining social distancing
by keeping the middle seat empty, practicing hygiene and setting up health checkpoints. It is
further recommended that all airline industry providers involved in this sector should focus
more on the freighter and cargo segment, as amidst the pandemic, the international passenger
segment has been suspended, but the cargo segment is ongoing because trading is still
necessary. Thirdly, it is recommended that hotel businesses change their strategy to adapt
their accommodations for healthcare apartments, serviced apartments, and monthly stays with
the hotels full facilities in order to gain domestic customers while international tourists are
yet to return.
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For future research, it is recommended that there should be examination of the impacts
one year after the COVID-19 pandemic as well as the changes of the tourism and hospitality
strategies that have been adapted to the new normal behaviour.
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